Do You Need to Consult with an Accountant?
When you are running a business, your ability to manage your cash flow will determine the financial stability of your company. That’s why hiring or, at the very least, consulting with an accountant is one of the smartest decisions you can make as an entrepreneur.
An accountant is more than just a number cruncher. Accountants provide advise on choosing legal structures, saving money at tax time and how to manage cash flow effectively. And when you are ready to apply for a business loan, an account will prepare financial documents and act as a liaison with lenders who need information about your business’ financial projections
If you are still questioning how a business accountant can help your business, read the tips below.
Establishing Your Business
When you are ready to start your business, consult with an accountant. There are several legal structures available to entrepreneurs–sole proprietorship, LLC, S-Corp or C-Corp. Each structure has different advantages and disadvantages that will impact your ability to protect and grow your business. An accountant will help you choose the legal structure that is best for your business.
In addition, an accountant can help you develop a financial plan for your business. Learning to manage your business’ finances early on will help you to grow a successful business that is able to sustain itself in good times and bad.
Read This: My Lawyer Told Me To Open an LLC!
Seeking Business Funding
An accountant can help you navigate the business lending process. When you are seeking business funding, having good business credit is just one requirement. You also need to have detailed financial statements and an accountant can help you organize these documents for your application. The more organized and detailed your financial documents are, the more you are showing lenders that you are a business owner who is truly committed to the growth of a business. Your accountant can also answer questions that lenders pose concerning your business’ financial growth and your projections.
In addition to helping you prepare financial documents, when a lender offers your a loan, an accountant can help you understand the interest rate as well as terms and conditions associated with a loan.
Tax Time Help
As a business owner, filing taxes can be diffiuct. Do you know what tax credits your business is eligible for with its current legal structure? What deductions can your business take? An accountant can advise you on the best practices for paying your taxes so that you not only avoid hefty penalties and fines but also save money.
Not to mention, if the IRS ever audits your business, an accountant will help you navigate the auditing process. An accountant will advise you of how to work with auditors and how to manage your taxes after the audit has been completed.
Managing Rapid Growth
If your business is growing quickly and profits are awesome, it’s time to consult with an accountant. As your business grows, you will be hiring new employees or working with more contractors. You will also be ordering equipment and supplies more often. And while expansion is great for a business, it’s important to keep track of all of your incoming revenue and outgoing expenses. An accountant can help you manage your cash flow so that you can grow your business successfully.
Consulting an accountant is an important step in making sure that your business is ready for success, not failure. By working with an accountant, you will learn new ways of saving and making money that will help your business grow.